You often encounter the phrase “Assembly required” as a consumer, highlighting the significant time investment involved in assembling products. For manufacturers, the concept extends to their operations, where the pre-assembly of component parts is a crucial part of the production process. This step can consume valuable time, inventory space, and human resources. To enhance efficiency and reduce costs, many manufacturers partner with third-party logistics (3PL) providers that specialize in custom kitting services.

Custom Kitting Services Defined

Custom kitting refers to the practice in which 3PL companies assemble various individual components into coordinated kits and deliver these kits to manufacturers for streamlined assembly.

3PLs bring expertise to kitting solutions through both their advanced knowledge and strategic investments in logistics technologies, ensuring accuracy in inventory management and order fulfillment. The question arises: why not manage the assembly of parts in-house?

To illustrate, consider a scenario where you, as a manufacturer, need to assemble 2,000 units in a day with a team of 15 associates. Each employee would be responsible for compiling parts for approximately 133 products before assembly. The time spent searching for and organizing these parts can lead to inefficiencies, errors, and wasted resources.

With custom kitting, your team receives well-organized kits that contain all necessary components for a specific stage of the assembly process. This approach eliminates the need for hunting down parts and reduces clutter, allowing for a more efficient and quicker production environment.

Kitting in the Production Process

The integration of custom kitting into the production model enhances efficiency across several stages:

1. Storage: Parts inventory is housed within a 3PL warehouse.
2. Kitting: Upon production readiness, the 3PL assembles these parts into organized kits.
3. Delivery: The kits are delivered to your operation through just-in-time (JIT) delivery, ensuring materials arrive precisely when needed.
4. Production: Your associates assemble the final products using the supplied kits.
5. Packaging and Distribution: The 3PL also manages the custom packaging and distribution of the completed products.

This collaboration maximizes the time savings gained through custom kitting, allowing the 3PL to manage critical aspects of the production process such as storage, packaging, and JIT delivery.

Expanded Kitting Services

Beyond basic kitting, there are several additional services available that fall under the kitting umbrella:

• Product Bundling: This involves grouping multiple products into a single package, a strategy often employed in retail to promote related items.
• Pre-assembly of Products: Some items may be partially assembled to simplify the final assembly for you or retailers.
• Labeling and Branding: Custom labels may be added to products or kits before shipment, including barcodes and regulatory requirements.
• Quality Control and Inspection: During kitting, products can be inspected to ensure they meet desired quality standards.
• Return Handling and Re-kitting: Returned kits can be disassembled, inspected for damage, and reconfigured for resale.
• Inventory Management for Kits: Ensuring that all kitted items are adequately stocked for assembly is crucial for seamless operations.
• Custom Packaging Solutions: Tailored packaging can optimize kitted items for transport and enhance the customer unboxing experience.

Benefits of Custom Kitting Services

Utilizing 3PL custom kitting services can deliver numerous advantages:

• Space Efficiency: By outsourcing storage and assembly, your production area can be dedicated solely to assembly, boosting throughput. The 3PL manages inventory, delivering parts exactly when you need them.
• Cost and Time Savings: With the time usually spent on locating and assembling parts eliminated, your labor costs and time management improve markedly. In the context of a tight labor market, this efficiency is particularly valuable.
• Supply Chain Optimization: In an era of frequent supply chain disruptions, working with a 3PL allows you to order and stock only the materials necessary for your production needs, freeing up capital.